NEARLY a quarter of the electricity that Jamaica Public Service Company (JPS) transmits is lost to heat and theft.

The light and power company managed to lower the amount of system losses to 22.3 per cent of the electricity generated last year, down from 24 per cent in 2009.

However, JPS contends that the challenge of substantially reducing leakages is socio-economic and largely outside of its control.

“The theft of electricity is in fact a crime and a national problem which occurs all across the island, committed by persons from all spectrums of society,” said the utility company in its latest tariff submission to the Office of the Utilities Regulations (OUR).

Indeed, energy use measured at a feeder — an intermediary point for electricity distribution — in Constant Spring showed that 46.7 per cent of the electricity delivered to the area was not billed for, much like a feeder in Tredegar Park, which measured 33.2 per cent loss.

“Additionally, we find this challenge increasing in a recessionary environment where energy prices are increasing primarily as a result of rising oil prices,” said the utility company.

The result is a US$64 million-($5.6 billion) a-month fuel bill, which is mostly passed on to paying consumers.

JPS has to take on quite a bit of the losses, given that the regulator requires JPS keep losses lower than 17.5 per cent.

The electricity distribution monopoly claims that it under-recovered US$18.8 million of the cost of fuel last year, due to a 30 per cent increase in oil, which it said magnified the impact of the penalty, as well of falling short of its target of 21.4 per cent. The company said it is anticipating that the fuel penalty will grow to more than US$25 million in 2012.

JPS is actively pursuing loss-reduction measures, including regularising its customers and the introducing anti-theft mechanisms to its system.

However, it had to cease those activities in the months of August, September and December 2011 to ensure the safety of its work crews “as a result of the significant customer outcry pertaining to the installation of digital metres” and national elections, which triggered a fear of escalated violence during this election period.

Even then, JPS did manage to investigate 134,621 customer accounts for irregularities, which include meter tampering, direct connections and metre bypasses. They found breaches in 18.5 per cent of the cases, which resulted in the company recovering the cost of 70 gigawatthours (GWh) — the equivalent of the energy used by nearly 30,000 Jamaican homes for a year — from those customers.

But investigations are costly and labour intensive work, which utilised approximately 200 personnel and cost over US$14 million in operating and maintenance expenses in 2011.

The electricity provider believes the implementation of the new 360 megawatt (MW) generation expansion project in 2015, will be key to bringing down electricity prices (by more than 30 per cent) and allowing Jamaica to grow its way out of this high losses environment.

But JPS estimates that there are still an estimated 100,000 households all across the island living in informal settlements where they access electricity illegally.

Aside from the large security details it would require to access those communities in an effort to regularise those consumers, JPS expects it would have to spend US$30 million a year to wire 10,000 households over the next ten years — an ambitious plan.

In the meantime, JPS is undertaking its Residential Automated Metering Infrastructure (RAMI) programme, which aims to introduce anti-theft mechanisms to its system.

The programme is heavily resisted by residents, according to JPS.

“Residents demand to be given employment or else they will not allow us to enter their communities,” said JPS.

They also pointed out that hostility and threats towards house-wiring contractors and theft of materials during the construction phase and multiple demonstrations in RAMI areas due to fear of high electricity bills.

“Some persons also discovered new avenues to stealing by extracting electricity from neighbouring communities or from street lights,” added JPS. “This contributed to an overspending on some projects while others were delayed to ensure illegal abstraction opportunities were eliminated.”